Alberta residents, small business owners struggle with soaring gas prices

Frustrated. That’s how Drilon Beqa, owner of Flash Express Courier, describes his reaction to the skyrocketing price of gas.

Available in some places in Calgary just a few weeks ago for just over $1 per litre, the cost to fill up at most stations on Wednesday was more than $1.66 per litre.

For Beqa, that means the cost of filling up his van, which used to be $80 two to three times per week, has jumped to $130 every time he pumps.

“We have about eight vans out there, which is a lot for gas, but especially with the gas prices today it really hits our pocket so we’ve implemented a fuel surcharge for our customers which also fluctuates based on the fuel charges,” said Beqa.

“It’s not good for us, it’s not for them (our customers) because now they’re paying more money for fuel charges on their invoices.”

Even with the fuel surcharge, Beqa says it’s not enough to cover the recent increases in the price of gas.

“I try to keep it as low as possible — the lower the gas, the lower the fuel surcharge — but when it goes up, then I have to bump it up, which is not good for anybody.

“They do understand the economics, but again, when money comes out of your pocket, nobody’s happy about it. Even with the fuel surcharges, we’re still paying for fuel out of our pocket. The surcharge does cover a little bit, but it doesn’t cover the whole thing. So it’s still costing us money to fill.”

In an interview with Global News on Monday, Dan McTeague, the head of gasbuddy.ca, said he expects to see more companies, including airlines, railways and trucking companies, to start adding surcharges to reflect the higher costs of transportation.

“All forms of energy have taken a pretty substantial hit from the high energy prices,” said McTeague, who added the longer the conflict goes on, the greater the impact he expects on prices.

For the city of Calgary, which operates a very large fleet of vehicles, the fluctuation in the price of fuel over the short term is less of a problem.

Kevin Ertmoed, manager of fleet and inventory for the City of Calgary, said the city helps mitigate the price swings through “long‑term contracts with two suppliers, which help provide a reliable supply and more predictable pricing.”

“These contracts include hedging, which provides a 12‑month pricing outlook and allows the city to review and secure fuel prices on a rolling basis, rather than locking in one fixed price for the entire year,” said Ertmoed.

“This approach helps manage market uncertainty, support budget stability, and deliver good value for taxpayers.”

The jump in the price of gas is a direct result of the war in the Middle East that began on Feb. 28 and has caused chaos for global oil markets, cutting off much of the supply out of the region.

On Wednesday, Brent Crude, the international benchmark, which was selling at US $70 just a few weeks ago, was trading more than 60 per cent higher, at over US $108 a barrel, while West Texas Intermediate, the benchmark U.S. crude was selling for just under US $100 per barrel.

Trevor Tombe, director of Fiscal and Economic Policy at the University of Calgary’s School of Public Policy, said while higher oil prices are good for the Alberta government, because it makes a “considerable” amount of income off oil and gas, they are “a strain on individuals in the short term.”

“At the end of the day, additional costs are largely passed on to consumers of a good or a service, and so higher energy prices impact us throughout the economy across a range of things that we buy.”

“Food in particular is one of the most energy intensive non-energy products and just for context here, we’ve seen oil prices and other costs, fertilizer costs, rise by about 50 per cent in the last couple of weeks.”

“If that continues to remain at these high levels that would add about $500 in costs to your average household just from the energy costs alone,” said Tombe.

“But then you’d roughly double that once all of the supply chain effects are taken into account. So it means more expensive food. It means more expensive goods that are transported by truck and so on.”

“So overall, it’s about a $1,000 hit,” said Tombe. “Half of that from all of these what we call upstream effects where businesses face higher costs that ultimately then get passed through to consumers.”

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